Joshua Seemu­n­gal

Se­nior Mul­ti­me­dia Re­porter

joshua.seemu­n­gal@guardian.co.tt

It has been three years since Prime Min­is­ter Dr Kei­th Row­ley said he would have Cab­i­net con­sid­er putting a cap on the av­er­age ex­emp­tion on mo­tor ve­hi­cles for MPs at $350,000 but then made an about-turn on the mat­ter af­ter seek­ing le­gal ad­vice.

“In terms of ex­emp­tions on mo­tor ve­hi­cles, I too am con­cerned be­cause if those ex­emp­tions are be­ing used for the pur­pose for which they are meant, I have no prob­lem. But if they are be­ing used to fa­cil­i­tate oth­er peo­ple in the way that they have been, then they re­quire to be looked at,” PM Row­ley had said in Oc­to­ber 2020.

But, just months af­ter, on Ju­ly 10, 2021, at a COVID-19 press con­fer­ence, PM Row­ley re­vealed that de­spite his state­ment in Par­lia­ment that he would con­sid­er re­view­ing the mat­ter, he had sought le­gal ad­vice and could not in­ter­fere with it. “I sought le­gal ad­vice, and the le­gal ad­vice was these are peo­ple’s terms of en­gage­ment, and you have no au­thor­i­ty to in­ter­fere with it,” he had said.

Years lat­er, this is­sue re­mains con­tentious, as dur­ing the three years, or­di­nary cit­i­zens have spent ap­prox­i­mate­ly $732 mil­lion on mo­tor ve­hi­cle tax­es and du­ties–about $234 mil­lion in mo­tor ve­hi­cle tax­es and du­ties in 2021, about $231 mil­lion in 2022, and a pro­ject­ed $266.6 mil­lion in mo­tor ve­hi­cle tax­es and du­ties in 2023, ac­cord­ing to 2023 bud­get doc­u­ments.

Cit­i­zens al­so owe more than $3.8 bil­lion in out­stand­ing ve­hic­u­lar loans to com­mer­cial banks as of 2022, ac­cord­ing to the Cen­tral Bank’s Ju­ly Eco­nom­ic Bul­letin.

The cost price of a ve­hi­cle at­tracts Val­ue Added Tax (VAT) at 12.5 per cent and mo­tor ve­hi­cle tax, which is charged based on en­gine ca­pac­i­ty–with larg­er en­gines at­tract­ing a high­er tax, while im­port du­ty de­pends on the ve­hi­cle’s en­gine ca­pac­i­ty and fu­el type.

In 2021, Op­po­si­tion MP Dr Roodal Mooni­lal had raised the is­sue of gov­ern­ment MPs ac­quir­ing tax-ex­empt ve­hi­cles dur­ing the COVID-19 pan­dem­ic giv­en the num­ber of peo­ple out of work as a re­sult of re­stric­tions. But this elicit­ed the re­sponse from PM Row­ley that he had no au­thor­i­ty to in­ter­fere with ex­emp­tions grant­ed to par­lia­men­tar­i­ans.

In the furore at the time, PM Row­ley ad­mit­ted that he too had pur­chased a ve­hi­cle, but did not dis­close the type and the tax ex­emp­tion, adding that he drove him­self around so that he does not lose the skill.

“I ac­cept the terms of my en­gage­ment and if it dis­turbs some of the peo­ple, I am sor­ry, but I don’t think it is fair for some­body to tell me what to do with what I earn when you have no in­ter­est in talk­ing to those who have stolen pub­lic mon­ey,” he had added.

PM Row­ley not­ed that the tax ex­emp­tion is part of the terms of en­gage­ment of thou­sands of dif­fer­ent peo­ple at dif­fer­ent lev­els.

In Sep­tem­ber 2022, Op­po­si­tion MP David Lee was ar­rest­ed and charged with con­spir­a­cy to de­fraud and mis­be­hav­iour in pub­lic of­fice in con­nec­tion with the pur­chase of a $2.3 mil­lion Mer­cedes-Benz. The ac­cu­sa­tions are that the $1.4 mil­lion in tax ex­emp­tions de­rived may have ben­e­fit­ed a UNC par­ty fi­nancier. Lee has de­nied any wrong­do­ing, say­ing he is the vic­tim of a PNM po­lit­i­cal ploy.

In 2022, Lo­cal Gov­ern­ment and Rur­al De­vel­op­ment Min­is­ter Faris Al-Rawi was cleared by the Trinidad and To­ba­go Po­lice Ser­vice (TTPS) of crim­i­nal wrong­do­ing fol­low­ing an in­ves­ti­ga­tion in­to the sale of a Porsche to for­mer Po­lice Ser­vice Com­mis­sion mem­ber Roger Kawals­ingh. Al-Rawi was ac­cused by the Op­po­si­tion of fail­ing to trans­fer the ve­hi­cle to Kawals­ingh and fail­ing to no­ti­fy the Trans­port Com­mis­sion­er of a change of own­er­ship. The TTPS said there was in­suf­fi­cient ev­i­dence. Al-Rawi de­nied any wrong­do­ing.

SRC’s rec­om­men­da­tion to cap ex­emp­tions re­ject­ed in 2014

The top­ic has been con­tro­ver­sial for some time, with the SRC (Salaries Re­view Com­mis­sion) is­su­ing a rec­om­men­da­tion to cap the ex­emp­tions in 2014, on­ly for their at­tempts to be re­ject­ed by both sides of the po­lit­i­cal di­vide.

“We main­tain the view that there is a need for ra­tio­nal­i­sa­tion of the fa­cil­i­ty giv­en the sig­nif­i­cant mon­e­tary val­ue of the ex­emp­tions for which cer­tain of­fice hold­ers are el­i­gi­ble, to­talling sev­er­al hun­dreds of thou­sands of dol­lars on a sin­gle ve­hi­cle, de­pend­ing on make and mod­el and this sum could po­ten­tial­ly in­crease in the event that high­er tax­es and du­ties are im­posed on mo­tor ve­hi­cles,” the 100th re­port of the Salaries Re­view Com­mis­sion stat­ed in Oc­to­ber 2014.

In 2017, a me­dia re­port re­vealed some of the ex­emp­tions MPs re­ceived on their ve­hi­cles via a se­ries of Free­dom of In­for­ma­tion re­quests. Among the things re­vealed was that Fi­nance Min­is­ter Colm Im­bert was ex­empt­ed from pay­ing more than $550,000 in tax­es in to­tal on a Mer­cedes-Benz pur­chased in 2010 and Porsche pur­chased in 2015 and that Op­po­si­tion Sen­a­tor Wade Mark was ex­empt­ed from pay­ing more than $1 mil­lion in tax­es in to­tal on three Toy­ota Pra­dos be­tween 2010 and 2015.

In 2020, how­ev­er, the is­sue re­turned af­ter Im­bert in his bud­get pre­sen­ta­tion an­nounced the re­moval of tax con­ces­sions on the im­por­ta­tion of pri­vate ve­hi­cles. He al­so an­nounced that the per­mis­si­ble age of im­port­ed ve­hi­cles was to be re­duced from four years to three years, as well as a re­duc­tion in the im­por­ta­tion quo­ta by 30 per cent In jus­ti­fy­ing the move, Min­is­ter Im­bert said there were too many cars in the coun­try, with the im­por­ta­tion of ve­hi­cles caus­ing a sub­stan­tial leak­age of for­eign ex­change. He ap­prox­i­mat­ed the val­ue of forex leak­age at US$400 mil­lion. Used-car deal­ers con­demned the move, while well-known econ­o­mists said that the sec­tor was not a ma­jor user of forex–es­ti­mat­ing that it used around sev­en per cent of the coun­try’s for­eign ex­change needs.

In 2020, leaked doc­u­ments showed that sev­er­al gov­ern­ment min­is­ters re­ceived more than $7 mil­lion in ex­emp­tions be­tween 2013 and 2020. The doc­u­ments show­ing the ex­emp­tions re­ceived by op­po­si­tion mem­bers were not leaked. In re­sponse to the leak, Prime Min­is­ter Row­ley ini­tial­ly de­fend­ed his Cab­i­net, say­ing there was no re­al pub­lic con­cern about the is­sue.

All MPs are ex­empt from pay­ing mo­tor ve­hi­cle tax, cus­toms du­ties and VAT on used or new ve­hi­cles im­port­ed every two years un­der the SRC. How­ev­er, the ve­hi­cle is not sup­posed to be sold dur­ing the two years or half of the tax­es are due to be re­paid.

The Sun­day Guardian re­cent­ly made a Free­dom of In­for­ma­tion re­quest seek­ing the val­ues of ex­emp­tions re­ceived by MPs since 2019 how­ev­er, this has not yet been re­ceived.

(BOX )

31,099 new ve­hi­cles reg­is­tered in T&T be­tween 2020 and 2022

Ac­cord­ing to the Cen­tral Sta­tis­ti­cal Of­fice, the num­ber of new ve­hi­cles reg­is­tered in T&T be­tween 2020 and 2022 was 31,099. Be­tween 2020 and 2022, 9,047 ve­hi­cles were sold com­mer­cial­ly, while 18,850 were sold pri­vate­ly.

Ac­cord­ing to the CSO, be­tween 2020 and 2022, the coun­try spent more than $113 bil­lion (US$16.7 bil­lion) in im­ports. Of that fig­ure, ap­prox­i­mate­ly 5.4 per cent, $6.2 bil­lion (US$920 mil­lion), was spent on ve­hi­cles and ve­hic­u­lar parts.

Be­tween Jan­u­ary and Au­gust 2023, ac­cord­ing to the CSO, there was US$4.2 bil­lion worth of sales of for­eign cur­ren­cy to the pub­lic by au­tho­rised forex deal­ers. Dur­ing the same time pe­ri­od, US$3 bil­lion worth of pur­chas­es by the au­tho­rised forex deal­ers from the pub­lic was record­ed.

Im­por­ta­tion of ve­hi­cles

Ac­cord­ing to the Unit­ed Na­tions Con­fer­ence on Trade and De­vel­op­ment (UNC­TAD) Au­to­mat­ed Sys­tem for Cus­toms Da­ta (ASY­CU­DA)–an in­te­grat­ed cus­toms man­age­ment sys­tem used glob­al­ly, in­clud­ing in T&T, 13,008 mo­tor ve­hi­cles were im­port­ed in T&T in 2021. Of that fig­ure, ac­cord­ing to Min­is­ter of Trade and In­dus­try Paula Gopee-Scoon speak­ing in 2022, 2,292 were for­eign-used ve­hi­cles. Ac­cord­ing to the Ob­ser­va­to­ry of Eco­nom­ic Com­plex­i­ty, an in­ter­na­tion­al da­ta vi­su­al­i­sa­tion web­site that com­piles 50 years of in­ter­na­tion­al trade da­ta in­clud­ing sub­na­tion­al lev­el da­ta, T&T im­port­ed more than US$174 mil­lion worth of cars in 2021. It found that most of the cars were im­port­ed from Japan, fol­lowed by Thai­land, South Ko­rea, In­dia and Ger­many.